lras

Question 1

define short run economic growth

Answer 1

an increase in gdp from one year to the next

Question 2

define short run

Answer 2

spare capacity exists in the economy

Question 3

define long run

Answer 3

no spare capacity

Question 4

consumer confidence

Answer 4

a measure of consumers feelings about current and future economic conditions used as an indicator of overall state economy

Question 5

define lras

Answer 5

an increase in the economies capacity from one year to the next

Question 6

list factors that shift out the lras and improve productivity

Answer 6

increase in quantity and quality of capital equipment
highly skilled workforce
innovation and improvements in productive process
factor mobility
improved attitudes of entrepreneurship
encourage more people to join labour supply

Question 7

benefits of economic growth

Answer 7

higher living standards
employment effects
fiscal dividend
accelerator effect

Question 8

costs of economic growth

Answer 8

risk of higher inflation and higher interest rates
environmental affects
inequalities in income and wealth